Fishy business in Namibia

Walvis Bay in Namibia tourists is a  huge industrial port filled with freighters and trawlers flanked by dozens of  fish plants. Rickety shacks line the roads along which the work-force are making their way home. Until recently, some of the schools here were just tents. Some of the hospitals and clinics don't have enough doctors, let alone medicine. But despite appearances - on paper, at least, Walvis Bay is a boom town. The Atlantic Ocean off Namibia's coast is teeming with fish. But many workers who are employed in the fishing industry suspect foreign investors are profiting from their hard work, and from their country's natural resources.

Two trawlers anchored out in the harbour provide a very small part of the answer. The Leader and the Sheriff belong to one of the world's biggest fishing companies, the Hong-Kong based Pacific Andes. In 2012, the company was invited into Namibia to work with some local investors, providing expertise and money, while the Namibians would bring fishing rights. The result is Atlantic Pacific Fishing (APF), 51% Namibian owned.

"These people offered a lot of promises but it never came to be," Ivo tells the BBC. "They were never transparent." The finance was especially worrying - they had never seen any documents, Ivo said

It seems APF signed a deal with a company called Brandberg to manage their affairs, in return for 4% of the company's revenues. But despite being named after a Namibian mountain, Brandberg is based 4,000 miles away - in Mauritius. Why? Well, because of the island's double taxation treaties with Namibia, signed more than 20 years ago. In theory, this agreement means that companies operating in two countries can avoid being taxed in both by deciding which one would get the tax. In this case, it is Mauritius which gets the money. But, it doesn't always work out fairly. Mauritius is a key location for tax avoidance, whereby companies can locate and avoid paying tax in some of the poorest countries in the world according to Action Aid's Anna Thomas.She added: "The IMF estimates that $200bn is lost every year by developing countries due to tax avoidance. That's a huge amount of money and it could be paying for schools and hospitals."

The effects can be seen in Namibia, a country where fishing, mining and farming account for nearly two-thirds of the country's economy, they contribute just 13% of the tax take.

It is absolutely untenable that we continue, year in, year out, giving resources away, see wealth built up in countries where the investors come from, but where the resource comes from, there is perpetual poverty and very little, small return from these natural resources," Namibian Finance Minister Carl Schettwein 

The BBC went looking for Brandberg at its registered address in Port Louis, Mauritius. Only, it couldn't find the company. Where it should have been, we found instead an office for Appleby, one of the world's largest providers of offshore legal services. One of the services they offer to their foreign clients is registering foreign companies in Mauritius. In fact, Brandberg the company that manages the Namibian fishing operation is actually based in Hong Kong. It was set up by Pacific Andes - one of the world's biggest fishing operations.

The "Paradise Papers" show that Brandberg appears to have no economic activity in Mauritius. The only two directors of the company based in Mauritius both work for Appleby. And an email from a firm of auditors asking for the physical address of Brandberg is told in reply: Hong Kong.  APF paid $420,000 (£320,000) less in tax over the course of 2013 and 2014 as a result of Brandberg being based in Mauritius.

Martin Hearson, a fellow at the London School of Economics who has been looking into the negative impact of double taxation agreements on the developing world, says it is part of a common tax avoidance strategy known as "treaty shopping". He continued: "It sounds like the management fees, management services that are being provided, are coming from other places, such as Hong Kong or maybe Namibia, itself. And in that case, the reason for the payments to go to Mauritius rather than directly to the place where the management fees were would be to obtain the treaty benefits." In short, he concluded it was "what you would expect to see if this was set up to avoid taxes in Namibia".

In Namibia Atlantic Pacific is now being wound up. The Namibian tax authorities are also launching an investigation into the parent company. For the residents of Walvis Bay it is another disappointment.